Outplacement firm Challenger, Gray, & Christmas announced that August hit its highest layoffs in 15 years.
Announced job cuts totaled 75,891 for the month, lurching 193% higher than July. Though the total was just 1% higher than the same month in 2023, it was the highest number for August going back to 2009, as the economy was still escaping the worst of the global financial crisis.On the hiring front, companies said they were adding just 6,101 new workers, up by nearly 2,500 since July, but down more than 21% from August 2023. The year-to-date hiring announcements of nearly 80,000 is the lowest total in history going back to 2005.“August’s surge in job cuts reflects growing economic uncertainty and shifting market dynamics,” said Andrew Challenger, the firm’s senior vice president. “Companies are facing a variety of pressures, from rising operational costs to concerns about a potential economic slowdown, leading them to make tough decisions about workforce management.”
The tech field faces the most layoffs:
Thursday’s report showed the biggest growth in planned layoffs came in the technology field, with companies announcing 41,829 cuts, the most in 20 months.“The labor market overall is softening,” Challenger said.Companies announcing job cuts most often cited cost-cutting and economic conditions as the reasons, though artificial intelligence also was listed for the first time since April.
I emphasized that part because the Fed cut rates by 50bps, which it did in September 2007.
What happened next? The housing crash, the banking crash, etc.
I should have done this years ago, but I will take numbers from these companies more to heart than anything from the government.
CNBC noted that the report is “out of sync with government reports.”
Of course, it’s out of sync with the government. The government reports showed a small rise in unemployment benefits and slightly slowing inflation.
But then we learned the BLS had to revise job creation numbers by over 800,000 for the last year because they bloated the statistic.
The Federal Reserve (END THE FED) and Biden-Harris administration love proclaiming that everything is fine and getting better.
Before I go on, I must remind you that no one knows precisely what will happen because of the cut rates. If they tell you they do, they are lying to you.
The best thing you can do is look at the past. Right now, it feels a little like 2007.
So what could happen?
Cutting rates encourages risk. Banks take out loans from other banks. Lower rates make it easier for those banks to get those loans.
The banks are then more open to approving loans.
That seems great because it encourages people to spend, fueling the economy.
We need a balance. As we saw in 2008, everything went haywire, and the bubble popped.
Where do the layoffs come in? Well, you cannot spend (should not spend!) if you don’t have a job or steady income.
The sane thing to do is not to provide loans to people who cannot pay them back. But the cut rates could push those banks and others to take that risk and give those people loans.
For example, with Harris pushing homeownership, the government will likely push banks to approve mortgages for people who cannot afford them.
With the Democrats brainwashing people into thinking we live in a fantasy world where money grows on trees, and everything is bountiful…it can get nasty.
The government could stop spending and printing money and end the Fed. But that’s me in my fantasy world.
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